The Research On The Performance And Influencing Factors Of Listed Firms Following Private Placements

Equity refinancing is a main form of capital finance for listed companies after theirIPOs. Private placement, replacing public placement and rights offering, has become themain refinance method after split share sturcture reform for its advantages like lowerrequirements and more simple offering procedures. Could corporate performace beimproved after private placement? What could influence corporate performance afterprivate placement? On one hand, it could verificate the firms' refinancing efficiency andeffectiveness which would affect the development of listed companies. On the otherhand, it is also the focus of investors and market regulators which would affectinvestors' revenues and soundly development of securities markets.Firstly, this paper elaborates the conception of private placement, briefly states andanalyzes the relevant policy evolution and development about private placement inChinese capital market. The private placement's performace and its metrics are defined.It also elaborates the theory hypothesis of listed companies' performance after privateplacement. Secondly, companies, conducting private placement in2006and2007aftersplit share sturcture reform, are selected as the samples. Choosing indicators fromprofitability, debt paying ability, operation ability and development ability, this papergets the comprehensive performance by adopting principal component analysis toexamine the performance changes around private placement. Finally, the paper selectsthe relevant factors from the characteristics of private placement and listed companies inorder to analyze their impacts on corperate performance.Empirical results show that listed companies' performance isn't improvedsignificantly after private placement. Corporate performance does not show significantdifferences compared with which of the corresponding companies those didn't conductprivate placement. Cash subscription, the differences between large shareholderssubscription proportion and assets before private placement, earnings management priorto private placement is negatively related to performance changes around privateplacement. In order to verify the linear relations are reasonable, it also tests theeffectiveness of the regressing model and gets good results.